SAULT COLLEGE OF APPLIED ARTS AND TECHNOLOGY SAULT STE. MARIE, ONTARIO COURSE OUTLINE

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1 SAULT COLLEGE OF APPLIED ARTS AND TECHNOLOGY SAULT STE. MARIE, ONTARIO Sault College COURSE OUTLINE COURSE TITLE: Macroeconomics CODE NO. : ECN 104 SEMESTER: Three PROGRAM: AUTHOR: Accounting, Business, & General Education Joe Lucchetti, BA, ABC, BBA, MSc. Office E4680 Phone joe.lucchetti@saultc.on.ca DATE: PREVIOUS OUTLINE DATED: Sep. /03 APPROVED: TOTAL CREDITS: PREREQUISITE(S): DEAN Three N/A DATE LENGTH OF COURSE: 16 Weeks TOTAL CREDIT HOURS: 48 Copyright 2004 The Sault College of Applied Arts & Technology Reproduction of this document by any means, in whole or in part, without prior written permission of Sault College of Applied Arts & Technology is prohibited. For additional information, please contact Sault College of Applied Arts and Technology at (705)

2 2 I. COURSE DESCRIPTION: Much of what goes on in the world is driven by economic considerations. Economics is therefore, relevant and important to all of us in our daily lives as we engage is various activities to earn a living. This course is designed to provide the student with a broad understanding of basic economic terms and concepts and the operation of a contemporary market economy. Macroeconomics is the study of how the major components of an economy interact and includes such topics as unemployment, inflation, interest rate policy, gross domestic product and government policies on spending and taxation. II. LEARNING OUTCOMES AND ELEMENTS OF PERFORMANCE: The weighting for the following outcomes is approximately equal. Upon successful completion of this course, the student will demonstrate the ability to: 1. Distinguish economics, macroeconomics, microeconomics, types of economic systems and explain various economic problems and goals. Define economics, macroeconomics and microeconomics. Explain the basic economic problem of scarcity and choice. Discuss, in detail, the factors of production. Define opportunity cost and its role in economics. Discuss the three basic economic questions. Outline different types of economic systems Draw and explain the circular flow in an economy. Discuss agreement and disagreements in economics. Produce a PPC and explain what it shows. Outline macroeconomic goals. 2. Demonstrate an understanding and apply the principles of the Market Mechanism (supply and demand). Distinguish between the terms demand and quantity demanded & supply and quantity supplied Define demand and supply curves and explain why they slope as the are. Discuss the concept of markets and market equilibrium.

3 3 List and discuss five factors which cause demand to change. List and explain six factors which cause supply to change Distinguish between changes in demand and changes in quantity demanded. Distinguish between changes in supply and changes in quantity supplied. Explain normal and inferior goods. 3. Demonstrate an understanding of the factors that determine the level of an economy s total production and the different methods of measuring that production. Discuss the circular flow of income and the product and factor markets. Distinguish between a flow of money and a stock of money. Outline the leakages and injections and their overall impact. Explain when an economy is growing, when it is shrinking, and when it is in equilibrium. Define Gross Domestic Product, Gross National Product, Net Domestic Product and Net National Product. Identify and explain the components of the GDP using the expenditure method. Discuss the limitations of the GDP figure. 4. Explain the relationship of Unemployment and Inflation with regard to Aggregate Supply and Aggregate Demand, & Economic Growth. Define economic growth and discuss its sources. Discuss how economic production and growth are measured Calculate such measurements as Nominal GDP, Real GDP, and the GDP Deflator. Name and discuss business cycles, their causes and impact. Outline the relationship between economic growth and economic welfare Name and explain the different types of unemployment. Explain how the unemployment rate is determined and be able to calculate the rate. Distinguish and explain the various categories of people in the

4 4 Labour Force Survey. Discuss the criticism of the official unemployment rate and the costs of unemployment. Define inflation, different types of inflation & calculate inflation. Demonstrate the use of the Rule of 70. Discuss the costs associated with inflation. Distinguish nominal from real interest rates. Outline the two classifications or causes of inflation. 5. Discuss the basic model of Aggregate Demand and Supply, the concept of Aggregate Expenditures and perform related calculations. Define aggregate demand and aggregate supply and explain their short-run and long-run implications. Discuss macroeconomic equilibrium. Outline the determinants of aggregate supply, real GDP, and the price level. Discuss the Keynesian and Neoclassical school of Aggregate Demand/Supply. Identify and explain the concept of potential GDP. Distinguish between autonomous and induced spending. Explain and calculate MPE, MLR, MTR, MPC, and MPS. Outline the relationship between the MPC and MPS. Discuss the components of the consumption and saving functions and perform the necessary calculations Explain the role of investment, government and net exports in the aggregate expenditure model. Discuss expenditure equilibrium and the changes in expenditures. Explain, calculate and use the multiplier. 6. Explain the origins, characteristics and functions of Money, the Banking System (deposit taking institutions) and the Money Market. Describe the four characteristics of money and the three functions of money.

5 5 Outline the different kinds of money. Define money and explain the different measurements. Explain the fractional reserve system of banking. Discuss spread and target reserve ratio. Name and explain Near Banks. Provide a detailed explanation of how banks create money. Explain, calculate and apply the money multiplier. Discuss reserves in the banking system. Discuss the various forms of demand for money compared to the desire for income. Explain equilibrium in the money market and how changes in the money market affect the economy. Discuss the monetarist view of money and the economy. 7 Discuss the origins and functions of the Bank of Canada and explain the uses of monetary tools to increase and decrease the money supply and the impact on the economy. Define monetary policy. Describe the origins and functions of the Bank of Canada. Explain the various functions of the Bank of Canada. Describe how the Bank of Canada can use each of its major monetary tools to affect the size of the money stock and subsequently economic activity. Explain open market operations and how they can be used to increase and decrease the money supply. Discuss whether or not monetary policy is needed. 8 Explain how international trade, along with free trade and protectionism, affect the economy. Potential Elements of Performance Explain the significance of specialization to international trade. Explain and apply absolute and comparative advantage Discuss why nations trade with each other. Explain how grains are made from trade and who are the winners and losers in international trade. Explain the importance of free trade and trade restrictions. Identify trade organizations and treaties of and their functions.

6 6 Argue for and against free trade. Explain the consequences of tariffs and non-tariff barriers. 9 Discuss international trade and the role of the exchange rate and the balance of payments in a modern economy. Define exchange rate and the types of exchange rates. Explain and illustrate how exchange rates are determined (changes in supply and demand). Define balance of payments and explain its categories and what is included. 10 Discuss the role of fiscal policy in a modern economy. Define fiscal policy. Discuss government revenue as it relates to the tax rate, the size of the GDP and the government s own spending. Discuss a balanced government budget and full-employment equilibrium. Explain the pros and cons of government having a balanced budget each fiscal year. Discuss the cause, size, and problems of Canada s national debt. III. TOPICS: 1. The Economic Problem 2. Demand and Supply: An Introduction 3. Measuring National Income (The Gross Domestic Product. 4. Growth, Unemployment and Inflation 5. Aggregate Demand and Supply 6. Aggregate Expenditures 7. Money and Banking 8. Monetary Policy 9. The Money Market 10. International Trade and Exchange Rates 11. Fiscal Policy

7 7 IV. REQUIRED RESOURCES/TEXTS/MATERIALS: Principal Text: John E. Sayre and Alan J. Morris, Principals of MacroEconomics, 4 th Edition; McGraw Hill Ryerson, 2004 ISBN V. EVALUATION PROCESS/GRADING SYSTEM: Students will be evaluated on the following basis: Assignments and Quizzes 25% First Test 20% Second Test 25% Final Examination (semester work) 30% TOTAL 100% TESTS: All tests will consist primarily of essay questions and will be rounded out with multiple choice questions (or other objective type questions) to complement and extend the test areas. Dates of tests will be announced approximately one week in advance. Students are required to write all tests and quizzes as scheduled!! THERE ARE NO RE-WRITES OF INDIVIDUAL TESTS OR QUIZZES!! Each student must meet the following requirements in order to complete this course successfully: 1. Must complete, in a fashion acceptable to the professor, all projects and assignments. 2. Must write the two tests and the final exam. If a student misses a test, or the final exam and has not made appropriate arrangements as outlined below, he/she will receive a mark of zero for that test/exam. 3. Must have an overall mark of 50%. This mark includes all work in the semester. Students who are not successful in achieving the minimum mark of 50% and/or do not complete the required assignments in an acceptable fashion, as they are due, will repeat the course. FINAL GRADES WILL BE ISSUED BY THE REGISTRAR S OFFICE

8 8 The following semester grades will be assigned to students in postsecondary courses: Grade Definition Grade Point Equivalent A % 4.00 A 80 89% 3.75 B 70 79% 3.00 C 60 69% 2.00 D 50 59% 1.00 F (Fail) 59% or below 0.00 CR (Credit) Credit for diploma requirements has been awarded. S Satisfactory achievement in field /clinical placement or non-graded subject areas. U Unsatisfactory achievement in field/clinical placement or non-graded subject areas. X A temporary grade. This is used in limited situations with extenuating circumstances giving a student additional time to complete the requirements for a course. NR W Grade not reported to Registrar's office. Student has withdrawn from the course without academic penalty. Students are required to have a minimum GPA of 2.00 to graduate. VI. SPECIAL NOTES: Special Needs: If you are a student with special needs (e.g. physical limitations, visual impairments, hearing impairments, or learning disabilities), you are encouraged to discuss required accommodations with the Special Needs office. Visit Room E1204 or call Extension 493 so that support services can be arranged for you.

9 9 Retention of course outlines: It is the responsibility of the student to retain all course outlines for possible future use in acquiring advanced standing at other postsecondary institutions. Plagiarism: Students should refer to the definition of academic dishonesty in Student Rights and Responsibilities. Students who engage in academic dishonesty will receive an automatic failure for that submission and/or such other penalty, up to and including expulsion from the course/program, as may be decided by the professor/dean. In order to protect students from inadvertent plagiarism, to protect the copyright of the material referenced, and to credit the author of the material, it is the policy of the department to employ a documentation format for referencing source material. Course outline amendments: The Professor reserves the right to change the information contained in this course outline depending on the needs of the learner and the availability of resources. Substitute course information is available in the Registrar's office. Missed Tests/Exam: If a student is not able to write a test/exam as scheduled, for medical reasons or some other emergency, that student is asked to contact the professor prior to the test/exam and provide an explanation that is acceptable to the professor. (Medical certificates or other appropriate proof may be required.) Following the student s return to the college, he/she must request, in writing, to write a makeup for the messed test/exam. This request will be in proper letter form (typed), hard copy (no ) and must outline the reasons for requesting special consideration. Making such a request does not guarantee that the student will receive permission to make up for the missed tests/exam. Such requests must be make within one week of the student s return to the college.

10 10 The professor will consider the request, and if permission is granted, the test/exam will be given at the end of the semester, or at some other time at the professor s convenience. This will allow time for the student to prepare for the test without missing important work and to provide time for the professor to prepare a new test. In considering the request, the professor will taken a number of factors into consideration. These will include, but limited to, the student s attendance and participation in class, completion of other tests, quizzes, and assignments as scheduled and the professor's judgment as to the student s potential success. In all other cases, the student will receive a mark of zero for that test. THERE WILL BE NO SUPPLEMENTARY TESTS!! Attendance: Students are expected to attend all scheduled classes. Attendance will be taken for each class on a sign in basis starting shortly after the semester begins. Students will be advised when the process is to begin. Students must sign themselves in only!! Signing for another student, whether the other student is present or not, will be tantamount to academic dishonesty. Students are advised to read the Students Rights and Responsibilities for the consequences of academic dishonesty. While students are expected to attend all classes, it is understood that circumstances beyond their control may prevent them from doing so. Students who find themselves in this category should treat the classes as a job and take action accordingly. In all cases, attendance of less than 80% of the scheduled classes is not acceptable. The professor will use attendance as one of the factors in considering student requests for special consideration in writing missed tests, submitting late assignments, etc.

11 11 Submitting Assigned Work: All assignments, projects, questions, etc. must be submitted to the professor at the beginning of class on the due date. Once the class starts, any assignment, etc. which has not been submitted will be considered late. If no class is scheduled on the due date, students are required to deliver the assignments, etc. to the professor s office, by the deadline time. Assignments, etc. may be submitted in advance; normally assignments, etc. will not be accepted after the stated deadline. If a student wishes consideration for a late submission, he/she must make this request in a formal typed letter, (hard copy) providing an explanation. If the assignment is accepted late, a penalty will be assessed. Assignments, etc. will not be accepted late once those which have been submitted on time have been graded and returned to students. It is the student s responsibility to ensure that the professor gets his/her completed assignment, etc. Do not place the assignment, etc. in the professor s mailbox and do not deliver it to his/her officer during class. Return of Students Work: Tests, quizzes, assignments, etc. will be returned to students during one of the normal class times. Any student not present at that time must pick up his/her test, etc. at the professor s office within three weeks of that class. Tests, etc. not picked up within the three weeks will be discarded. End of semester tests, etc. will be held for three weeks following the end of the semester. If they have not been picked up within that three-week period, they will be discarded. Tests, etc. will be returned only to the students to whom they belong. In limited circumstances tests, etc. may be given to another student, if the student to whom they belong provides written instructions in a formal letter (hard copy) to the professor requesting that the test, etc. be given to a particular individual. Students are required to retain their tests, quizzes, assignments, etc. in the event that there is a disagreement with the mark received and the mark recorded by the professor. If the student is not able to present the instrument in question, the professor s recorded mark will stand.

12 12 Questions &/or Concerns: IT WILL BE TO THE STUDENTS ADVANTAGE TO HAVE QUESTIONS, CONCERNS, OR PROBLEMS RELATED TO HIS COURSE RESOLVED AS SOON AS POSSIBLE. IF YOU REQUIRE ASSISTANCE, HAVE PROBLEMS OR CONCERNS, SEE YOUR PROFESSOR. HE WILL BE MORE THAN HAPPY TO HELP!! Students are urged to ask questions and to participate in and contribute to the class discussion. Students are also encouraged to read newspapers, magazines, etc. and to tune in to radio and television newscasts for economic and business news. This will make the subject more understandable, interesting, and practical. It will provided students the opportunity to better apply the theory and to enhance his/her opportunity for success in this course. PLEASE KEEP IN MIND THAT ECONOMICS IS NOT A SPECTATOR SPORT. STUDENTS MUST DO THE REQUIRED WORK IF THEY EXPECT TO BE SUCCESSFUL. Classroom Decorum: Students will respect the diversity and the dignity of those in the classroom. Student will respect the professor s right and duty to teach and students right to learn without interference. Students who cause any interference with the objectives of the class will be given a verbal warning on the first occasion. If such behaviour continues, the student will be asked to leave the classroom and will not be permitted to return until he/she commits in writing, typed, (a formal letter) that he/she will conduct themselves appropriately in the classroom. This letter will be addressed to the professor who will submit a copy to the Dean. If a student is asked to leave the classroom a second time, he/she must make an appointment with the Dean who will decide if the student will be permitted to return to class. In the event that a student is asked to leave the classroom a third time, he/she will not be permitted back to the classroom for the rest of the semester. The Dean will also decide if any other action needs to be taken. Students attending this class do so to study Macroeconomics. Therefore, no other activity will be permitted. Student s who wish to engage in other activities will be asked to leave the classroom, as described above.

13 13 Other inappropriate behaviour includes, but not limited to, sleeping in class, or appearing to be sleeping in class, putting feet (foot) on the furniture, writing on the furniture, talking of otherwise communicating privately with other students, having a cell phone on during class, etc. It is the professor s intention to maintain proper classroom decorum at all times in order to provide the best possible learning and teaching environment. Only those students who are properly registered for this course or those invited by the professor are permitted to be in the classroom. VII. PRIOR LEARNING ASSESSMENT: Students who wish to apply for advanced credit in the course should consult the professor. Credit for prior learning will be given upon successful completion of a challenge exam or portfolio, if such are available and can be evaluated. VIII. DIRECT CREDIT TRANSFERS: Students who wish to apply for direct credit transfer (advanced standing) should obtain a direct credit transfer form from the Dean s secretary. Students will be required to provide a transcript and course outline related to the course in question. IX. GENERAL EDUCATION REQUIREMENTS This course meets the general education requirements.